New at Starbucks: Tuition Assistance

Walk into any Starbucks, and you’ll probably notice a little sign next to the register that says, “Our partners take care of you. We’re taking care of them.”

The company isn’t referring to paycheck or health care benefits alone — although in 1988 it was the first company to offer part-time employees health insurance. Last week Starbucks Corp. announced it will partner with Arizona State University on a new college tuition assistance program.

The Starbucks College Achievement Plan will reimburse all tuition costs for employees working an average of 20 hours a week and completing their junior or senior year through ASU Online. Employees in their freshman or sophomore years will receive a 22 percent scholarship from ASU and pay the remainder on their own.

“We are seeing this systemic problem with young working adults today, that the American dream is becoming less of a possibility,” said Laurel Harper, a Starbucks spokeswoman. “And part of the American dream is getting an education.”

Unlike most tuition assistance programs that require employees to pursue degrees in fields that apply to their current positions and career tracks, Starbucks’ program will apply to any major as long as the student attends ASU Online, finishes the semester and remains employed at the company. There is no service requirement after the degree is completed.

“If our partners decide that they want to pursue a degree in electrical engineering, we hope that they will take the values they learned here at Starbucks and the leadership that they’ve developed wherever they go,” Harper said. “And hopefully they’ll be stopping by our stores and getting their coffee for the morning.”

It’s hard for anyone to denigrate what Starbucks is doing to help its employees get degrees, but some experts and other tuition assistance program managers see room for improvement in its initiative.

Pam Tate, CEO of the Council for Adult and Experiential Learning, said although Starbucks’ plan is head and shoulders above anything its competitors offer, the company’s approach might not be the most beneficial to its employees.

She said one problem is, like many companies, Starbucks reimburses students instead of prepaying the tuition. Harper said the company sees its program as more than tuition reimbursement — it’s a way to make sure employees have skin in the game, which seems like common sense. If students pay out of pocket for school, they’ll try harder than if their company just gives it to them.

But Tate said that’s not always the best way to approach tuition assistance.

“The first thing that is the barrier to the student, the biggest one, is having to put up the money for tuition,” Tate said. “So if their company reimburses them, even the fact that they have to wait for a check is enough to keep people from starting. That’s why we advocate for programs to be shifted to prepayment.”

Some programs are already there, such as one at Verizon Communications, which prepays $4,000 for part-time workers and $8,000 for full-time workers as long as they attend an accredited college and their major applies to their career at Verizon.

This prepay method hasn’t hampered the benefits reaped, said Dorothy Martin, Verizon’s national tuition assistance program manager. In fact, the intense measurements her department takes have shown massive return on investment — so much so that Martin said the money saved on recruitment, retention, leadership development and performance improvement cycles right back into the assistance offered.

“You’ve got to do this program looking at the business impact and to see or understand that it’s reducing turnover, increasing job productivity, enhancing your talent management strategy,” she said. “It’s setting you up as an employer of choice when you use an effective program as a recruiting tool.”

Another criticism of the Starbucks program is that it focuses on employees at the end of their college careers, paying fully for juniors and seniors but only part of freshmen and sophomores’ tuitions. Tate said it’s tougher for students to start college than finish it, so tuition assistance programs should focus more on getting students started.

But as many tweaks as tuition assistance experts believe should be made to the program, the consensus is that Starbucks’ intentions are beneficial for more than its public image.

“Any company that is moving in the direction of helping employees get educated is doing a great service,” Martin said. “Hats off to Starbucks, hats off to Walmart, hats off to any company that is helping the American economy and the individual as well.”